This is an application to strike out part of a claim in these proceedings, which turn on the regulations governing public procurement exercises. That part is a claim for a “declaration of ineffectiveness”. The claim concerns tenders for a new generation of trains to run under the English Channel. The first defendant (Eurostar) is the train operator and it invited the claimant (Alstom) and the second defendant (Siemens) to tender for those trains. The contract is a valuable one. In October 2010 Eurostar announced that Siemens was the successful tenderer. Alstom objected to that decision and on 19th October 2010 commenced proceedings (action no HC10C03303 – the 2010 action) in which it sought inter alia an injunction to restrain Eurostar from contracting with Siemens. Vos J dismissed a claim for an interim injunction restraining Eurostar from contracting on 29th October ([2010] EWHC 2747 (Ch)); reference should be made to that decision for the history of the matter up until then. Eurostar entered into a contract (actually 2 contracts, but I can treat them as one for these purposes) with Siemens on 3rd December 2010 and announced to Alstom on that date that the contract had been entered into.

(a) First, it is said that the necessary grounds do not exist for the application of the remedy of a declaration of ineffectiveness. The regulations in question prescribe certain grounds which have to be fulfilled before the remedy is available, and it is said that none of them apply.

(b) Second, if that is wrong, it is said that the claim is made out of time. The regulations prescribe certain limited time periods within which any claim for a declaration of ineffectiveness must be made, and it is said that this claim falls outside the applicable period.

a. the Court is satisfied that a decision or action taken by a utility was in breach of the duty owed in accordance with Regulations 45A or 45B; and

b. the contract has already been entered into.

(2) In those circumstances, the Court –

(a) must, if it is satisfied that any of the grounds for ineffectiveness applies, make a declaration of ineffectiveness in respect of the contract unless Regulation 45L requires the Court not to do so…”

(2) Subject to paragraph (3), the first ground applies where the contract has been awarded without prior publication of a notice in the Official Journal in any case in which these Regulations require the prior publication of such a notice.

…

The second ground

(5) The second ground applies where all the following apply –

(a) the contract has been entered into in breach of any requirement imposed by -

(i) Regulation 33A (the standstill period) …

(b) there has also been a breach of the duty owed to the economic operator in accordance with regulation 45A or 45B in respect of obligations other than those imposed by regulation 33A (the standstill period) and this Part;

(c) the breach mentioned in sub-paragraph (a) has deprived the economic operator of the possibility of starting proceedings in respect of the breach mentioned in sub-paragraph (b) or, pursuing them to a proper conclusion, before the contract was entered into;

(d) the breach mentioned in sub-paragraph (b) has affected the chances of the economic operator obtaining the contract.”

(a) … a utility shall, as soon as possible after the decision has been made, inform the tenderers and candidates of its decision to award the contract, and shall do so by notice in writing by the most rapid means of communication practicable.

(2) Where it is to be sent to a tenderer, the notice referred to in paragraph (1) shall include -

(a) the criteria for the award of the contract;

(b) the reasons for the decision, including the characteristics and relative advantages of the relevant tender, the score (if any) obtained by -

(i) the economic operator which is to receive the notice; and

(ii) the economic operator to be awarded the contract,

and anything required by paragraph (10)

(c) the name of the economic operator to be awarded the contract; and

(d) a precise statement of either -

(i) when, in accordance with regulation 33A, the standstill period is expected to end and, if relevant, how the timing of its ending might be affected by any and, if so what, contingencies; or

(ii) the date before which the utility will not, in conformity with regulation 33A, enter into that contract.

…

(9) Except to the extent that the utility has already informed the economic operator (whether by notice under paragraph (1) or otherwise) … a utility shall within 15 days of the date on which it receives a request in writing from any economic operator which was unsuccessful -

(a) inform that economic operator of the reasons why it was unsuccessful; and

(b) if the economic operator submitted an admissible tender, the utility shall inform that economic operator of the characteristics and relative advantages of the successful tender and -

(1) Subject to regulation 17, for the purposes of seeking offers in relation to a proposed contract a utility shall make a call for competition.

(2) The requirement under paragraph (1) to make a call for competition is satisfied -

(a) In the case of a contract to be awarded using the restricted procedure or the negotiated procedure:

…

(ii) if a notice indicating the existence of a qualification system for economic operators has been sent to the Official Journal in accordance with regulation 25(17) and the requirement referred to in paragraph (5) is satisfied; or

(b) in any case by sending to the Official Journal a contract in [a prescribed form] containing the information specified in respect of the contract.

(5) The requirement referred to in paragraph (2)(a)(ii) is that the economic operators selected to tender for or to negotiate the contract are selected from the candidates which qualify in accordance with the system.”

(i) The Regulations define the expression “contract notice” as being the notice referred to in Reg 16(2)(b) (see the definitions in Reg 2(1), and then uses it from time to time (see e.g. Reg 45E(4)(a)). It does not use that defined expression in defining the first ground, leading to the strong inference that that ground is not so confined.

(ii) There is another set of regulations which is parallel to the Regulations with which this case is concerned, namely the Public Contract Regulations 2006 (SI 2006/5). Those parallel regulations were amended at the same time as the Regulations so as to introduce an ineffectiveness remedy in the same sort of terms. They provide for a parallel “first ground” in Reg 47K, which refers in terms to a “contract notice” where our Regulations refer to “a notice”, thereby demonstrating that Parliament (or the Treasury, which propounds the Regulations) knows what words to use when a “contract notice” is required. Those words are not used in the first ground with which I am concerned. It is true that the parallel regulations do not provide for notices other than a “contract notice”, but that does not detract from the force of the point just made.

(iii) Those 2 sets of regulations were amended pursuant to EC Directive 2007/66/EC. One set of amendments are required in relation to public contracts (the parallel regulations) and one in relation to the Regulations with which this case is concerned. The amendments introduce the ineffectiveness remedy, and in relation to the parallel regulations they use the expression “contract notice” and in relation to the present Regulations they use “a notice”, again pointing up the distinction. It is again, therefore, plain that different requirements are in play.

“(13) In order to combat the illegal direct award of contracts, which the Court of Justice has called the most serious breach of Community law in the field of public procurement on the part of a contracting authority or contracting entity, there should be provision for effective, proportionate and dissuasive sanctions. Therefore a contract resulting from an illegal direct award should in principle be considered ineffective …”

(14) Ineffectiveness is the most effective way to restore competition and to create new business opportunities for those economic operators which have been deprived illegally of their opportunity to compete. Direct awards within the meaning of this Directive should include all contract awards made without prior publication of a contract notice in the Official Journal of the European Union within the meaning of Directive 2004/18/EC. This corresponds to a procedure without prior call for competition within the meaning of Directive 2004/17/EC.”

(c) The breach of the standstill obligation has deprived Alstom of the possibility of starting proceedings for the breach in (b).

(d) The breach of the other obligations has affected the chance of Alstom getting the contract.

The defendants point out, correctly, that all 4 conditions have to be fulfilled for the ground to be available. The assumptions on which this application is taking place require that it be assumed that (b) is fulfilled.

” … alternatively, [Alstom relies] on the second ground in Regulation 45K (the First Defendant having failed to provide a standstill period as required by Regulation 33A in respect of the materially varied contract and having breached the Amended Regulations, by failing to hold a tender process in accordance therewith in relation to that contract).”

Mr Howell relies on this form of pleading and says that (c) and (d) are missing. Those missing elements could not now be added because of the expiry of all relevant limitation periods; so this ground must fail on that basis alone.

“By reason of the above breaches, the Claimant has been deprived of the opportunity to tender for the materially varied Contract; to tender for a contract with a clear baseline in relation to IGC requirements (present and future) and/or without the need for unqualified compliance with the fifth Mandatory Requirement; and/or to bid on the basis of the material amendments identified above.”

That is a pleading of the sort of things that would fall within (d), and while it is not in the context of the ineffectiveness claim, it is very arguably an answer to the pleading point taken in relation to (d). However, there is no doubt that there is no vestige of a pleading of requirement (c), and it is said by the defendants that this is more than just a pleading point – it is a point of substance because, on the facts, Alstom could not properly plead it at all. Accordingly, it is said that ground 2 cannot be available to Alstom.

(i) The summary within Reg 45E(5)(b) has to be in some sort of formal and identifiable form. It is not sufficient if equivalent information is given in other forms and in a variety of contexts as happened here.

(ii) There cannot ever have been a summary of reasons, because Reg 33(9) can never have been engaged in this case, because the material alterations mean that a different tendering process was going on to that which Alstom was participating in. Reg 33(9), in this context, can only be engaged where there is the same process being conducted in relation to each tenderer. Since Alstom was tendering on one basis, and Siemens was tendering on another, there was no proper process, Reg 33(9) cannot have been engaged; so there can never have been something qualifying as a summary of Reg 33(9) reasons.

(iii) In any event, it is not clear, on the evidence, that what was provided amounted to an adequate summary of any such reasons. In particular, Alstom was being told why it was unsuccessful on its tender, not why it was unsuccessful in relation to the different tendering exercise which was being conducted in relation to Siemens’ different tender.

(i) That what is required is not the full reasons which would be given under a 33(9) request, but a summary. The reasons themselves can, on the authorities, be short. In Strabag Benelux NV v Council of the European Union Case T-183/00 the reasons were given in a letter which did no more than set out that the tenders were evaluated against 8 previously specified criteria and stated that the successful tenderer had submitted the most economically advantageous tender. The reason went to say no more than this:

“For your information, I would add that your tender was also ranked highly for the qualitative evaluation criteria but was unsuccessful because of its price.”

That was all that was said. The Court stated that that was sufficient – see paragraph 57 of the judgment. If those are sufficient for reasons, then the level of detail required of a summary must be even less.

(ii) Regulation 33(9) anticipates that reasons might be given without an express request (“Except to the extent that the utility has already informed the economic operator, whether by notice under paragraph (1) or otherwise) …”). If they are fully given prior to a request, the utility needs to do nothing else on receipt of a request. Those opening words of the paragraph also tend to suggest that they might be given by aggregating more than one occasion on which information was provided. I think that is suggested in the word “otherwise”.

“Have Siemens altered their bid (technical or price) since their appointment as Preferred Bidder: If so, when and how; has it affected their scores?”

To which the response from Burges Salmon (solicitors for Eurostar) was:

“We do not consider that any material changes have been made to Siemens’ bid since its appointment as preferred bidder.

We have provided you with detailed explanations and responses to your queries about the difference between Alstom’s and Siemens’ bids. Eurostar owes duties of confidentiality to Siemens in respect of its bid which it is not prepared to breach. You are not entitled to further information in this respect.”

To the question:

“Is Siemens’ contract conditional upon the new rules: If so, how is that conditionality expressed.”

Burges Salmon replied:

“The contract when signed will not be conditional on the introduction of new Tunnel Safety Rules concerning DP [distributed power]. It does however provide a mechanism for managing the risk of the relevant rule not changing. The issue is discussed in detail in the body of this letter. We are not prepared to disclose the detail of the relevant contract clauses as this is commercially sensitive and confidential. It is not necessary for Alstom to understand the award of the contract.”